ITAT allows exemption of Rs 220 cr to Tata Education & Development Trust

In a major relief for Tata Education and Development Trust, the Income Tax Appellate Tribunal (ITAT) bench consisting of Justices PP Bhatt, President, ITAT , on 24^th July ruled in favour of the trust in their appeal against commissioner income tax (CIT) appeal order wherein a demand of more than Rs.220 crore was levied by the tax department .ITAT also stayed the matter of that demand without any minimum pay.

The case pertains to assessment years 2011-12 and 2012-13 on money spent by the Trust for creating an endowment fund at Cornell University, US, to provide scholarships to Indian students, and granting financial assistance to the Harvard Business School for constructing an executive building to be named Tata Hall. It donated ₹197.79 crore in 2011-12 and ₹25.37 crore in 2012-13.

The controversy began after the Public Account Committee (PAC) of the Lok Sabha in 2018 sought an inquiry in the matter as it believed that exemption granted by the direct tax body was in violation of the I-T Act.

Concluding the matter, the Income-tax Appellate Tribunal (ITAT) on Friday stated that all other grounds of appeals will be “rendered, academic and infructuous”. "We have decided this issue in favour of the assessee and thus allowed this ground of appeal. We, therefore, uphold the plea of the assessee, and delete the resultant disallowance of claim of exemption,” it said.

The Appellate Tribunal also stated in its order that, “this wholly avoidable litigation which does not only clog the serious litigation before the judicial forums but also diverts scarce resources of the philanthropic bodies, like the assessee before us, to the areas which do no good to the society at large.”  The Tribunal hoped that the admirable work being done by the Government of India, in pursuing such forward looking policies at the macro level, is not allowed to be overshadowed by the isolated situations like this, at the field level, which must be minimized by sensitizing the authorities concerned. It observed, “ An effort should be made to create a taxpayer friendly atmosphere by adopting just and fair approach at every level of the tax administration.”

 The detailed ruling of Appellate Tribunal may be accessed by clicking on link

Important

Union Minister for Finance & Corporate Affairs, Smt. Nirmala Sitharaman, today reviewed the performance of Special Window for Affordable and Mid Income Housing (SWAMIH)with Secretaries of Ministries of Finance and senior management team of the State Bank of India, SBI Capital Markets Limited and SBICAPS Ventures Limited (SVL). The fund has so far approved 81 projects with an investment of Rs 8767 crore.

The SWAMIH Investment Fund I has progressed from a policy announcement to an operational initiative on the ground. It has approved 81 projects that will enable the completion of almost 60,000 homes across India. These projects are spread across a mix of markets including large cities such as NCR, MMR, Bengaluru, Chennai, Pune and also Tier 2 locations including Karnal, Panipat, Lucknow, Surat, Dehradun, Kota, Nagpur, Jaipur, Nashik, Vizag, Chandigarh, etc. ( Annexure 1). Amongst these projects, investments in 18 projects have been given final clearance and disbursement is at various stages across 7 residential projects( Annexure 2). Applications from 353 stressed projects are under examination for the provision of assistance. It was also highlighted that activation of these construction sites by the Special Window would provide employment opportunities for various skilled and semi-skilled laborers. Additionally, the Fund is actively evaluating options to provide relief to ~15,000 homebuyers in certain long-stalled projects which are pending before the Honourable Supreme Court for resolution.

While reviewing the performance achieved by the Special Window, the Finance Minister appreciated the efforts. The recent initiative by the Fund to reduce the cost of capital to 12% has resulted in an increase in the number of projects that meet the funding criteria laid out under the Special Window. While acknowledging the steps taken by the Special Window to expedite participation from existing lenders, SmtSitharaman suggested that both private and public Banks, NBFCs and HFCs should see the Special Window as a stakeholder and increase support early completion of stressed projects.

The Team also apprised the Finance Minister about the control mechanisms being built in by the Fund to monitor project progress and ensure prudent utilization by calibrating investments in line with project progress. These steps would also bring in greater transparency in the sector in terms of accountability of project cash flows and eliminating diversion of funds.

During the review meeting, the Finance Minister asked the Department of Economic Affairs to closely monitor the performance of the SWAMIH Investment Fund I in order to ensure that the capital raised by the Fund is rapidly committed towards resolving stressed projects and remove any impediments that could arise in this process. SmtSitharaman also wanted speedy efforts to complete the construction of projects for which last-mile funding has been sanctioned.  The opportunity provided by the special mandate in this Fund combined with active support from existing project financiers should be directed towards this objective of providing immediate relief to homebuyers.SmtSitharaman stated that this Special Window was an unprecedented initiative that has provided extraordinary support to the real estate sector and poised it at the cusp of a turnaround despite such turbulent economic times.

Consumer Protection Act, passed by the Parliament in 2019, will come into effect from July 20, 2020

http://www.egazette.nic.in/WriteReadData/2020/220546.pdf

The new law aims at further protecting the interest of consumers and strengthening the mandate of consumer courts to take action against errant manufacturers, distributors, and sellers.

UPDATES

New Form 26AS is the Faceless hand-holding of the Taxpayers

The new Form 26AS is the faceless hand-holding of the taxpayers to e-file their income tax returns quickly and correctly. From this Assessment Year, taxpayers will see an improved Form 26AS which would carry some additional details on taxpayers’ financial transactions as specified in the Statement of Financial Transactions (SFTs) in various categories. It is stated that the information being received by the Income Tax Department from the filers of these specified SFTs is now being shown in Part E of Form 26AS to facilitate voluntary compliance, tax accountability and ease of e-filing of returns so that the same can be used by the taxpayer to file her or his income tax return (ITR) by calculating the correct tax liability in a feel-good environment. This would also bring in further transparency and accountability in the tax administration. The earlier Form 26AS used to give information regarding tax deducted at source and tax collected at source relating to a PAN, besides certain additional information including details of other taxes paid, refunds and TDS defaults. But now, it will have SFTs to help the taxpayers recall all their major financial transactions so that they have a ready reckoner to enable them while filing the ITR. It is further explained that the Department used to receive information like cash deposit/withdrawal from saving bank accounts, sale/purchase of immovable property, time deposits, credit card payments, purchase of shares, debentures, foreign currency, mutual funds, buy back of shares, cash payment for goods and services, etc. under Section 285BA of Income-tax Act, 1961 from “specified persons" like banks, mutual funds, institutions issuing bonds and registrars or sub-registrars etc., with regard to individuals having high-value financial transactions since the Financial Year 2016 onwards. Now, all such information under different SFTs will be shown in the new Form 26AS. It is stated that the Form 26AS for any taxpayer, from now onwards, will display in part E of the Form, different fields such as, type of transaction, name of SFT filer, date of transaction, single/joint party transaction, number of parties, amount, mode of payment and remarks etc. Furthermore, this would help the honest taxpayers with updated financial transactions while filing their returns, whereas it will desist those taxpayers who inadvertently conceal financial transactions in their returns. The new Form 26AS would also have information of transactions which used to be received up to Financial Year 2015-16 in the Annual Information Returns (AIR).

Important Notification on Tax Deducted at Source (TDS) for cash withdrawal Sec 194N

Under the Income Tax Act, 1961 with respect to Tax Deducted at Source [TDS] against cash withdrawals, the changes applicable with effect from 1 July 2020 are stated here under:

Changes applicable with effect from 1st July 2020:

If Income Tax returns are not filed for the preceding 3 Financial Years, for which the time limit for filing return under section 139(1) has expired, then rates of TDS under section 194N of the Income Tax Act, 1961 would be as follows:

TDS at 2 % on aggregate cash withdrawal exceeding INR 20 Lakh to 1 Crore, and

TDS at 5 % on aggregate cash withdrawal exceeding INR 1 Crore.

In all other cases, TDS at 2% would continue as mentioned above. However, in the absence of a valid Permanent Account Number [PAN] issued by the Income Tax Department, applicable TDS rate will be at 20%.

Lets understand better with help of a table given below:

TDS on Cash Withdrawal , Effective From 1st July, 2020
Aggregate cash  withdrawal in a Financial Year	Rate of TDS if ITR of last 3 years filed	Rate of TDS if ITR of last 3 years not filed
Upto Rs. 20 Lakhs	Nil	Nil
Rs. 20Lakhs to 1 Crore	Nil	2%
In excess of Rs. 1 Crore	2%	5%

 

Cash withdrawals from 1 April, 2020 onwards would be considered for calculating the cumulative cash withdrawal for the purpose of TDS.

Below is the list of persons/ entities who are exempted from TDS on cash withdrawal:

Government;

Banking company or co-operative society engaged in carrying on the business of banking or a post office;

Business correspondent of a banking company or co-operative society engaged in carrying on the business of banking;

Any white label automated teller machine operator of a banking company or co-operative society engaged in carrying on the business of banking, in accordance with the authorization issued by the Reserve Bank of India;

Such other person(s) as the Central Government may notify.

MSMEs (New criteria) w.e.f. 01st July 2020

MSMEs New Criteria w.e.f. 01st July 2020

Union Ministry of Micro, Small and Medium Enterprises (M/o MSMEs) has issued Gazette notification to pave way for implementation of the upward revision in the definition and criteria of MSMEs in the country. The new definition and criterion will come into effect from 1st July, 2020.

 

After 14 years since the MSME Development Act came into existence in 2006, a revision in MSME definition was announced in the Atmnirbhar Bharat package on 13th May, 2020. As per this announcement, the definition of Micro manufacturing and services units was increased to Rs. 1 Crore of investment and Rs. 5 Crore of turnover. The limit of small unit was increased to Rs. 10 Crore of investment and Rs 50 Crore of turnover. Similarly, the limit of medium unit was increased to Rs. 20 Crore of investment and Rs. 100 Crore of turnover. 

The Government of India on 01.06.2020 decided for further upward revision of the MSME Definition. For medium Enterprises, now it will be Rs. 50 Crore of investment and Rs. 250 Crore of turnover.

UPDATES

Economy

⚫The Center's fiscal deficit is expected to touch 7.6% in 2020-21, more than double the Budget Estimate, as the country spends extra to minimize the impact of the Covid-19 pandemic while facing a shortfall in revenues.

⚫India and the US have signed an MOU to develop a strategic petroleum reserve in America and the two countries are in advanced stage of discussion to store crude oil in America to increase India's stockpile.

Finance
⚫The Finance Ministry said PSB's have sanctioned Rs 19,668.87 crore to 71 MSME hubs across the country under the Rs 3-trillion Emergency Credit Line Guarantee Scheme.

⚫The I-Tax Dept has issued refunds worth Rs 71,229 crore to over 2.1 million taxpayers during April 8 to July 11. It is further emphasised that all the refund related cleaning up of the tax demands is being taken up on priority and is likely to be completed by August 31, 2020.

Current Affairs
⚫The Railways terminated the contract of a Chinese firm for signaling and telecommunication work on the Eastern Dedicated Freight Corridor due to poor progress.
⚫Over 1,300 exporters who had claimed GST tax refunds of Rs 1,875 crore were untraceable at their principal place of business in a massive verification exercise the Govt initiated after identifying 7,516 risky exporters. Exporters are identified as 'risky' on the basis of specific risk indicators based on customs, GST, income tax and DGFT data.